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Exhibit 20A-2 Macro AD/AS Models

question 58

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Exhibit 20A-2 Macro AD/AS Models
Exhibit 20A-2 Macro AD/AS Models   As shown in Panel (a)  of Exhibit 20A-2, assume the economy adopts a classical nonintervention policy. Which of the following would cause the economy to self-correct? A)  Competition among firms for workers increases the nominal wage and SRAS shifts rightward. B)  Long-run equilibrium will be established at Y<sub> 1 </sub> and P<sub> 2 </sub>. C)  Long-run equilibrium will be established at Y<sub> 1 </sub> and P<sub> 3 </sub>. D)  Competition among unemployed workers decreases nominal wages and SRAS shifts rightward.
As shown in Panel (a) of Exhibit 20A-2, assume the economy adopts a classical nonintervention policy. Which of the following would cause the economy to self-correct?


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